Self-Employment: Five Top Tips for Going It Alone
Are you thinking of handing in your notice as an employee and entering the world of self- employment as a freelancer or contractor? If you are on the verge of becoming self- employed or have recently joined the many that already do freelance or contract work then it is worth reading this handy guide. These are the top five leadership tips for going it alone, to help you through the whole process of setting up as self-employed.
Firstly, you need to deal with the financial side of the business. It is always a good idea to employ the services of an accountant and in particular to look for the best accountants for contractors and freelancers. You will be legally obliged to keep accurate records of all your in-comings and outgoings. An accountant can offer advice on bookkeeping and help fill in your self-assessment form each year.
Make sure that you have thought about finances before you even start up your business. There will be a time between your leaving regular employment and your business generating an income during which cash flow will be tight. Make sure you set aside at least two months of living expenses to give you a chance at making self-employment a success without financial worries.
Register as Self-Employed
Remember that it is important to register your new self-employed status with HM Revenue and Customs. You will get fined if you forget to do this. It is an easy process that can be completed online or over the phone in about 10 minutes.
You will more than likely need to consider insurance for your self-employed venture. There are many different policies, depending on the nature of the work you do. Some insurance policies may be a legal requirement in your line of work. Freelancers and contractors will often need cover such as professional-indemnity insurance.
Plan for the Future
Remember that as you are self-employed you do not have the benefits of being an employee. In particular, you will not have a company pension. This means that you will need to plan for your future and, ultimately, your retirement. A stakeholder pension is often the best option for the self-employed and will help supplement the state pension you will receive when you do eventually retire.
You may also need to consider the growth of your business and when you might change from working alone to employing other people. Most businesses should have a clear five-year plan set out for future growth, though this does depend to some extent on the nature of the business and line of work. You may decide that you want to remain a sole trader, for example and not employ any more staff.
Remember to be realistic about your business and what you hope to achieve in the first year. Make sure you do your research and know your market. With good preparation and hard work, entering the world of self-employment can result in a highly rewarding job and give you greater flexibility in your work-life balance.